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TOPIC: Healios Further Validates MultiStem with $55MM Commitment - MONEY TALKS

Healios Further Validates MultiStem with $55MM Commitment - MONEY TALKS 13 Mar 2018 10:18 #11513

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HEALIOS K.K. (“Healios”) entered into a license agreement with Athersys, Inc. (“Athersys”) in January 2016 and currently is conducting a Phase 2/3 trial to develop a new treatment for acute ischemic stroke in Japan using the stem cell product MultiStem®.
At the same time, Healios obtained an exclusive option for the development of two additional MultiStem clinical indications in Japan, including the treatment of Acute Respiratory Distress Syndrome ("ARDS") and another indication in the orthopaedic area.
Healios today announces that, at the board of directors’ meeting held on March 13, 2018, it has resolved to (1) Enter into a letter of intent (“LOI”) with Athersys to expand the exclusive license and option to develop MultiStem products. (2) Invest in Athersys and acquire a warrant to enable the acquisition of up to 19.9% of the shares of Athersys. (3) Deposit $10 million into escrow.
1. Purpose of the decision

Healios has committed “To be the change in an ever-evolving world through enrichment of living” as its mission and has brought forward its vision of “By making use of the regenerative powers of iPSC therapies, we will heal and bring hope to those worldwide who are suffering. We will create a global infrastructure to develop, manufacture and promote our therapies from within the Healios family of businesses. We will build a biotechnology company founded on solid principles in which every individual can trust.”

In order to make that mission and vision a reality, we have pursued the following hybrid strategy for business expansion:

(a) Short-term strategy: The development of products that contribute to strengthening the company's business position, through a development pipeline with prospects for approval in Japan within approximately 3 years.

(b) Long-term strategy: The development of innovative foundational technologies that build a de facto standard worldwide. Using the know-how and earnings we acquire through (a), we will invest strategically in (b) in order to achieve sustained, explosive growth.

We believe that this decision to expand our relationship with Athersys will contribute to the improvement of our corporate value from both of these perspectives.

Contribution to the short-term strategy:
In the face of an increase in the number of patients, acute ischemic stroke is still a disease with limited treatment options, so this is a field with a high level of unmet medical needs. In addition, with the application of Japan's new regulations on regenerative medical products, MultiStem appears to be a treatment with a high probability of obtaining early approval, and we believe that its development is likely to contribute greatly to improving our corporate value in the short term. We have received a designation under the SAKIGAKE Designation System and are currently carrying out our clinical trial. The construction of a production system for our anticipated post-approval requirements is progressing domestically at Nikon CeLL innovation Co. Ltd., and we have put in place a platform to further expand the range of target diseases.

Therefore, by means of this LOI, we will change one of the disease targets included in our current option rights and instead acquire development license rights for ARDS and trauma, which are areas with higher unmet medical needs.

ARDS, being one of the diseases with a high level of unmet medical needs, requires a new treatment here in Japan. The development of such treatment can contribute significantly to improving our corporate value in the short term, similar to the development we are pursuing in relation to acute ischemic stroke. In addition, this LOI includes an exclusive option to develop and commercialize MultiStem products for ischemic stroke, ARDS and trauma in China.

These rights will help strengthen our earnings structure, consistent with our short-term strategy. Contribution to the long-term strategy:

As a result of research we have performed for 2 years and 2 months post licensing, it has turned out not only that MultiStem itself may be a cell therapy against several diseases, but also that its mechanism of action against immunosuppression etc. could possibly be utilized in the development of iPSC regenerating medicine which Healios is developing.

For example, MultiStem can be a material for the manufacturing of “organ bud” products, an area on which we are now performing joint research with Yokohama City University. Though Healios currently holds option rights only for the development of liver buds, through this LOI it may be revised to be used for all organs globally.

Moreover, it was found that the possibilities of the immunosuppressive effects by using MultiStem in combination with iPSC regenerative medicine includes ophthalmological diseases, among others. We highly anticipate various synergistic effects with our long-term strategy. In this way, MultiStem developed by Athersys will not only lead to strengthening our business by expanding our pipeline, which can contribute to high profitability in the short term, but it also may be utilized in the field of iPSC regenerative medicine, which is core platform business of Healios. It may become one of the 3 important elements in our development of regenerative medicine. We considered that strengthening our alliance with Athersys, who develops such important technologies, is therefore crucial, and we have reached this agreement as part of a comprehensive business decision. 2. Overview of the agreement (1) Overview of a LOI to expand exclusive license and option rights regarding MultiStem (i) Exclusive license - In Japan: Development and commercialization for ARDS and trauma - Global: Development and commercialization of organ bud therapies using MultiStem - Global: Development and commercialization of MultiStem products for ophthalmological indications - Global: Development and commercialization of iPSC derived RPE cell products using MultiStem And certain other rights. (ii) Exclusive option Development and commercialization of MultiStem products for ischemic stroke, ARDS and trauma in China. A binding LOI has been executed today and the transaction is expected to be completed by April 30, 2018. Healios will pay a total of $ 35 million in case of the execution of the expansion agreement described above. The content of payment is as follows: $ 10 million (Deposit into escrow along with the LOI today) This deposit will be applied as either (1) the initial portion of the $ 35 million payment associated with the execution of the expansion agreements, or (2) if such agreements are not executed on or before April 30, 2018, payment for expanding the scope of the current Japan license for ARDS, organ bud and ophthalmological indications. $ 25 million (Payment commences after concluding the expansion agreement) Upon entering into this expansion agreement, a remaining amount of $ 25 million will be paid to Athersys. On the other hand, all $ 25 million will be deducted from milestone payment that we are obligated to pay to Athersys in the future when development succeeds for ischemic stroke, ARDS or trauma. Payment will be made for 2 years and 6 months (10 times) from the conclusion of the expansion agreement, by 2.5 million dollars each. (2) Overview of the strategic investment To strengthen our partnership with Athersys, Healios will make an approximate $21 million equity investment at $1.76 per share (The closing bid price of Athersys stock on March 12, 2018, plus a premium of 13.5%). With this strategic investment of approximately $ 21 million, Healios will acquire 8.7% of the issued shares of Athersys and become its largest shareholder. As part of Healios’ equity investment, Dr. Hardy Kagimoto, CEO of Healios, would be nominated for election to the Athersys Board of Directors at the next scheduled annual stockholders’ meeting in June 2018. 4 In addition to its purchase of 12 million shares of common stock as part of its equity investment, Healios will receive a warrant that will give it the right, but not the obligation, to purchase additional shares of Athersys common stock up until September 1, 2020, subject to certain conditions and limitations, as well as a cap on the total number of shares Healios may own during the term of the warrant of 19.9% of Athersys’ outstanding common stock. “Through this meaningful expansion of our relationship with Athersys, we aim to leverage MultiStem to accelerate the practical application of regenerative medicine across a variety of unmet patient needs. We are delighted to be working even more closely with them in this regard,” commented Dr. Hardy Kagimoto, President and CEO of Healios. “This is a significant opportunity for both Healios and Athersys,” commented Dr. Gil Van Bokkelen, CEO of Athersys. “It provides for a meaningful expansion of the existing partnership, providing a much broader scope of rights for Healios, while providing Athersys with substantial additional capital and a committed development partner in key areas.”

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Healios Further Validates MultiStem with $55MM Commitment - MONEY TALKS 13 Mar 2018 10:33 #11514

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WST - good news for ATHX - still need to find a partner to fund stroke in the US.

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Healios Further Validates MultiStem with $55MM Commitment - MONEY TALKS 14 Mar 2018 12:14 #11516

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rodney.strongg wrote: WST - good news for ATHX - still need to find a partner to fund stroke in the US.


PS - It is way past due for CYTX to have some partnering news - C'mon Hedrick, surprise us - even a blind squirrel finds a nut once in a while!

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Healios Further Validates MultiStem with $55MM Commitment - MONEY TALKS 15 Mar 2018 10:36 #11517

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Healios Further Validates MultiStem with $55MM Commitment - MONEY TALKS 15 Mar 2018 10:54 #11518

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Wall Street Titan wrote: For those interested... seekingalpha.com/article/4156157-athersys-gets-56-million-healios-stem-cell-deal


Makes no sense why ATHX's SP has not done better considering the great news - it had a decent move initially, but up from an awful low point - this stock was 2.50 only 6 months ago - down again today despite higher mkt. - the deal itself should have gotten them back to 2.50???

Waiting patiently for some decent partnership news from CYTX!

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Healios Further Validates MultiStem with $55MM Commitment - MONEY TALKS 15 Mar 2018 12:31 #11519

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RS
Even though ATHX expanded its relationship, it was still a dilutive raise....just better than a open market raise.
Street has priced this in.

Only thing I see holding up CYTX right now is hope something comes from FDA this month....any partnership will not benefit us much at this stage.
More cash needed.

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Healios Further Validates MultiStem with $55MM Commitment - MONEY TALKS 15 Mar 2018 13:54 #11520

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myownhedgefund wrote: RS
Even though ATHX expanded its relationship, it was still a dilutive raise....just better than a open market raise.
Street has priced this in.

Only thing I see holding up CYTX right now is hope something comes from FDA this month....any partnership will not benefit us much at this stage.
More cash needed.


Point one - yes, some dilutive shares at 1.76 totaling $21 million - however, another 35 million coming from Healios after April signing of agreement - plus, it appears that Healios is carrying a lot more of the weight o/s the US than could have ever been expected - stock s/b much higher.

Point two - the partnership could bring in the much needed cash that you indicated - also, agree that FDA news is much needed and likely due shortly imo.

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Healios Further Validates MultiStem with $55MM Commitment - MONEY TALKS 15 Mar 2018 14:05 #11521

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I give CYTX a 2% chance that something positive happens from the FDA...there will be another phase 3....question is who will pay for it and when ?

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Healios Further Validates MultiStem with $55MM Commitment - MONEY TALKS 15 Mar 2018 14:20 #11522

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Do not hold your breath waiting for partnership!!!!!!!!!!!!!!!!!!

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Healios Further Validates MultiStem with $55MM Commitment - MONEY TALKS 15 Mar 2018 14:29 #11523

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mtpinman

Their best chance is for the Azaya assets and that wont be until 2019.
RS refuses to acknowledge the serious cash situation and the most likely way it is resolved is through more dilution.
Lets see how high they want to raise the authorized shares at the annual meeting...will it be in May this year or will they wait for more dire times in summer ?

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Healios Further Validates MultiStem with $55MM Commitment - MONEY TALKS 15 Mar 2018 18:32 #11524

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myownhedgefund wrote: mtpinman

Their best chance is for the Azaya assets and that wont be until 2019.
RS refuses to acknowledge the serious cash situation and the most likely way it is resolved is through more dilution.
Lets see how high they want to raise the authorized shares at the annual meeting...will it be in May this year or will they wait for more dire times in summer ?


HF, calm down - you seem a bit hyper - may be that's a good sign for CYTX - LOL.

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Healios Further Validates MultiStem with $55MM Commitment - MONEY TALKS 17 Mar 2018 09:17 #11541

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Love the way Athersys structured the warrant agreement that was disclosed in SEC filing Friday after close and is designed, IMHO, in a manenr that will create catalysts for further share price appreciation.

The Warrant will become exercisable once Healios makes the initial payment under the Collaboration Expansion Agreement, as defined below. However, with respect to the 4,000,000 Warrant Shares referenced below, only, these Warrant Shares will become exercisable upon release of the Escrow Amount to the Company, as described below. The Warrant may be terminated by the Company under certain conditions, including if Healios does not make the initial payment required by the Collaboration Expansion Agreement. Under the terms of the Warrant, Healios will have the right to exercise the Warrant and purchase up to an aggregate of 20,000,000 Warrant Shares at the following exercise prices during the following periods:



• Up to 6,000,000 Warrant Shares in the aggregate as follows: (i) during the period from June 1, 2018 through December 31, 2018, up to 1,500,000 Warrant Shares at an exercise price of $2.50 per Warrant Share; (ii) during the period from September 1, 2018 through March 31, 2019, up to 1,500,000 Warrant Shares at an exercise price of $2.75 per Warrant Share; (iii) during the period from January 1, 2019 through June 30, 2019, up to 1,500,000 Warrant Shares at an exercise price of $3.00 per Warrant Share; and (iv) during the period from April 1, 2019 through September 30, 2019, up to 1,500,000 Warrant Shares at an exercise price of $3.25 per Warrant Share;


• Up to 4,000,000 Warrant Shares during the period beginning on the later of (i) the date that the Collaboration Expansion Agreement has been entered into and (ii) the date that the $10.0 million held in escrow as contemplated by the LOI (defined below under Item 8.01 of this Current Report on Form 8-K) is released to the Company, through September 1, 2020, at an exercise price per Warrant Share equal to the greater of $1.76 and the Reference Price (which is generally 110% of the average closing price per share of the Company’s common stock for the ten trading days ending on the trading day immediately preceding (and not including) the date the Warrant is exercised); and



Up to 10,000,000 Warrant Shares in the aggregate as follows: (i) during the period from June 1, 2018 through August 31, 2018, at an exercise price per Warrant Share equal to the greater of $2.50 and the Reference Price; (ii) during the period from September 1, 2018 through November 30, 2018, at an exercise price per Warrant Share equal to the greater of $2.75 and the Reference Price; (iii) during the period from December 1, 2018 through February 28, 2019, at an exercise price per Warrant Share equal to the greater of $3.00 and the Reference Price; (iv) during the period from March 1, 2019 through May 31, 2019, at an exercise price per Warrant Share equal to the greater of $3.25 and the Reference Price; (v) during the period from June 1, 2019 through August 31, 2019, at an exercise price per Warrant Share equal to the greater of $3.50 and the Reference Price; (vi) during the period from September 1, 2019 through November 30, 2019, at an exercise price per Warrant Share equal to the greater of $3.75 and the Reference Price; (vii) during the period from December 1, 2019 through February 29, 2020, at an exercise price per

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Healios Further Validates MultiStem with $55MM Commitment - MONEY TALKS 17 Mar 2018 11:47 #11543

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Whats the current status of the ATHX stroke trial in Japan ?
Still enrolling I presume but expected completion times and such ?
What is the trial name ?

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Healios Further Validates MultiStem with $55MM Commitment - MONEY TALKS 20 Mar 2018 13:10 #11569

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Hedge, The trial is currently enrolling but started about about a year late due to screw ups by manufacturing partner Lonza. Enrollment is expected to be complete before year end 2019 and 90 day data in 1st quarter 2020. However, it wouldn't surprise me if it is completed up to 6 months earlier. It is called the TREASURE trial. Remember in Japan you can obtain 7 year conditional approval with full reimbursement if the endpoint is not met yet safety is demonstrated along with signals of efficacy. The trial is powered to achieve full approval however. 220 patients to be enrolled. 30+ enrollment sites but not sure how many are open so far. clinicaltrials.gov/ct2/show/NCT02961504

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Healios Further Validates MultiStem with $55MM Commitment - MONEY TALKS 20 Mar 2018 13:58 #11572

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Thanks WST
To be honest I haven't looked at ATHX for years...if I get the time I will try to review their latest filings.

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Healios Further Validates MultiStem with $55MM Commitment - MONEY TALKS 20 Mar 2018 14:21 #11574

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myownhedgefund wrote: Thanks WST
To be honest I haven't looked at ATHX for years...if I get the time I will try to review their latest filings.


You should look into ATHX - could be either a huge winner or zero, more likely the former - I would love to see you posting on their Reddit site - those guys will eat you alive!

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Healios Further Validates MultiStem with $55MM Commitment - MONEY TALKS 20 Mar 2018 14:33 #11577

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LOLOLOL....I don't know...could be too scary !:evil:

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Healios Further Validates MultiStem with $55MM Commitment - MONEY TALKS 20 Mar 2018 14:45 #11578

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Hedge,
You'd be more than welcome on the $ATHX reddit board. The board does kick out those who whine under multiple IDs but that wont be an issue for you. Here is the Healios take on Athersys and the stroke trial: www.healios.co.jp/wp-content/uploads/2018/03/Binding-Letter-of-Intent-to-Expand-MultiStem-Collaboration.pdf Unusually aggressive words from a Japanese company.

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Healios Further Validates MultiStem with $55MM Commitment - MONEY TALKS 20 Mar 2018 14:56 #11579

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Wall Street Titan wrote: Hedge,
You'd be more than welcome on the $ATHX reddit board. The board does kick out those who whine under multiple IDs but that wont be an issue for you. Here is the Healios take on Athersys and the stroke trial: www.healios.co.jp/wp-content/uploads/2018/03/Binding-Letter-of-Intent-to-Expand-MultiStem-Collaboration.pdf Unusually aggressive words from the Japanese

/

Great potential for ATHX just as long as WST does not write any more SA articles which inevitably reduce the value of the stock immediately just as his CYTX articles use to do years ago! LOL.

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